Home › Posts tagged sap

Tag: sap

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , , , ,

SAP has appointed a new global head of artificial intelligence, Walter Sun, after the previous post-holder quit to found her own AI startup.

For the past 18 years, Sun worked at Microsoft, most recently as VP of AI for its business and applications platform group. Sun has a PhD from MIT and continued to publish academic research papers during his time at Microsoft, in addition to teaching at Seattle and Washington universities.

As part of Microsoft’s development team, Sun created Bing Predicts, the inference engine that provides the “favored to win” forecasts beneath search results for sporting fixtures and attempted to predict the 2016 US presidential election winner. (Spoiler alert: it failed.)

More usefully for enterprises, he also helped develop Dynamics 365 AI for Market Insights, a feature for Microsoft’s ERP and CRM platform that scans search data to provide enterprises with information about emerging trends in social interest and sentiment around their brands. Most recently, he was involved in the introduction of Dynamics 365 Copilot, which draws on OpenAI’s GPT-4 generative AI model to, among other things, help marketers write engaging sales pitches. In a recent blog post, Sun described how Microsoft researchers conducted experiments to compare the performance of different AI models for use in Dynamics 365. His colleagues also studied how to write the most effective prompts for soliciting useful responses from generative AI systems.

Sun replaces Feiyu Xu as SAP’s global head of AI. She joined the company in 2020, after a three-year stint in a similar role at Lenovo. Prior to that, she had worked for two decades at the German Research Center for Artificial Intelligence, DFKI.

In the three years Xu led SAP’s AI initiatives, the company introduced AI technologies to many of its products, including tools for supply chain planning, expense management, customer experience, and online commerce. In May 2023, around the time Xu announced her intention to leave the company, SAP said it would embed IBM’s Watson AI technology into its products.

SAP’s AI product team

The entire AI unit that previously reported to Xu will now report to Sun, an SAP representative said. Sun’s team will include two VPs of AI technology, Sebastian Wieczorek and Ulf Brackmann; a CTO, Johannes Hoffart, and a global AI product manager, Nadine Hoffmann.

Sun will report directly to Philipp Herzig, SAP’s head of cross-product engineering and experience, who reports to SAP’s executive board member for product engineering, Thomas Saueressig.

SAP couldn’t say whether Sun will have a seat on the company’s AI Ethics Steering Committee as his predecessor, Xu, did. For now, the only representative of the AI team on the committee is Wieczorek, the VP of AI technology. The other eight committee members hold senior posts with responsibility for marketing, data protection, government affairs, legal, diversity, customer data, quality, and sustainability.

As for Xu, after leaving SAP, she co-founded Nyonic, a Berlin-based startup that aims to build industry-focused, multilingual AI models that meet European ethical and legal standards. Xu is Nyonic’s chief innovation officer, and her co-founders include serial AI entrepreneur Han Dong as CEO in Shanghai, NLP expert Johannes Otterbach as CTO, computational linguist Hans Uszkoreit as chief science officer, and Vanessa Cann, a board member of the German AI Association, as CEO for Europe. The company is hiring engineers in Berlin and Shanghai.

Enterprise Applications, SAP

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , , , , ,

When MOD Pizza opened in 2008, customers had a chance to get a taste of something different. MOD, which stands for “Made on Demand,” offers customizable, artisan pizzas, giving customers a choice of more than 40 toppings with various sauces, and customizable salads —delivered superfast.

MOD in America

But pizza (and salads) alone isn’t what separates the Seattle-based chain from the competition and has made it a rapidly growing success. It now has more than 500 system-wide locations throughout the country. 

Two other factors, in addition to its high-quality, personalized products, set MOD Pizza apart from the crowd. The first is a unique pricing strategy. The size of the pizza and not the number of toppings determines the price. So, no matter how many toppings you want, the price is the same for the size you choose. 

The second factor has proven to be an essential ingredient for success: the human factor. Without dedicated, customer-focused employees, even a restaurant known for its cuisine can be difficult to stomach if the service is poor. Happy employees equal happy customers. In 2015, Fortune Magazine named MOD Pizza “one of the 20 Best Workplaces in Retail in the entire US.”

“For MOD Pizza, providing exceptional employee experiences is key to driving workforce engagement and business success,” says Tara Gambill, senior director of enterprise systems for MOD. And to help maintain those exceptional experiences, MOD Pizza added to its business recipe SAP solutions, including SAP SuccessFactors and SAP S/4HANA Cloud, public edition.

Keeping up with the MOD Squad 

MOD Pizza has more than 10,000 employees, known as the “MOD Squad” (perhaps influenced by the 1968 TV series of the same name – you remember, the one with Linc, Julie, and Pete.) That works out to hundreds of MOD Squad events occurring every day such as hires, transfers, promotions, and separations, generating a lot of data. 

With the chain’s rapid growth, its legacy technology couldn’t keep up. Data was entered manually, which, in some cases, led to inconsistencies and errors and slowed down operations. The company’s enterprise resource planning (ERP) and human resources (HR) systems weren’t integrated, creating information silos. Recruiting and onboarding processes were cumbersome. Those issues and more affected the business efficiency and MOD Squad experience.  

Cooking with SAP

MOD Pizza was looking for a solution to efficiently automate, accelerate, and connect the company’s HR and ERP processes and scale. SAP delivered with SAP SuccessFactors (for HR) and SAP S/4HANA Cloud, public edition (for ERP). SAP Business Technology Platform (BTP) provides the scalable foundation for the company’s digital transformation, and SAP Master Data Integration enables accurate data to be available enterprise wide.

MOD has also employed Qualtrics Experience Management solutions to capture employee feedback and refine recruiting and onboarding processes.

“The ability of SAP SuccessFactors and S/4HANA Cloud, public edition to handle our HR and back-office ERP needs in a scalable and powerful way allows us to leverage an intelligent core and weave all of our end-to-end processes together,” says Tara.

MOD managers can now focus on partnering with their teams instead of being overwhelmed with time-consuming HR and finance processes. “Bringing in this single, cloud-based platform to manage all these activities is a game-changer for MOD,” says Tara.

Out of the oven — automating and integrating

Today, back-of-the-house systems and capabilities – including ordering, inventory, labor management/scheduling, repair, and maintenance costs – are integrated into SAP S/4HANA Cloud, public edition, for seamless operation. 

Hiring and onboarding are frictionless and accelerated to help new employees report to work faster and easier. Up to 1,000 new hires are onboarded each month. 

SAP solutions help MOD Pizza manage 400 event data changes daily. By avoiding manual data entry, the chain saves labor – more than 15 hours a week – and eliminates errors. 

It all adds up to a recipe for ongoing success and happiness – for the MOD Squad, the squad’s pizza home, and MOD customers. For its accomplishments, MOD Pizza has been named a winner in the Experience Wizard category in the 2023 SAP Innovation Awards, which is celebrating its 10th anniversary.

To learn more about MOD Pizza’s Innovation Awards recipe for success, check out their Innovation Awards pitch deck.

Digital Transformation

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , ,

ERP software provider SAP on Tuesday said it is partnering with IBM to infuse the latter’s Watson artificial intelligence (AI) engine across its entire solutions portfolio, including SAP S/4 HANA, S/4 HANA Cloud, SAP Business One, and SAP Business ByDesign.

The move, which is expected to help SAP exploit the natural language processing (NLP) abilities of Watson AI along with predictive insights, is aimed at boosting the productivity of companies and accelerating innovation, especially across the retail, manufacturing, and utilities sectors, the companies said in a joint statement.

IBM Watson’s capabilities, according to the companies, will be integrated into the digital assistant inside SAP Start, which is a service that runs on every computer where an instance of an SAP system is started.

SAP Start monitors the runtime state of all SAP systems, processes, and instances along with reading logs, traces, and configuration files among other threads.

“With SAP Start, users can search for, launch and interactively engage with apps provided in cloud solutions from SAP and SAP S/4HANA Cloud,” the companies said.

The assistant inside SAP Start can also be used to run machine learning and AI to extract information from a variety of data sources and answer business queries, the companies added.

Typically, SAP uses the term digital assistant to collectively address or define all the digital assistants and chatbots in its portfolio, according to Juergen Butsmann, head of intelligent technologies in solution management for S/4 HANA.

“The Digital Assistant is the end-users ‘support center’ for ad hoc tasks, help, FAQ, or any other off-context inquiry. Whenever a user requests tasks or services (whether that be via commands, chat questions, or, in some cases, voice commands) digital assistants/chatbots can convey and interpret the user’s request, execute it efficiently in the system, and promptly provide a response,” Butsmann wrote in a blog post.

IBM Watson integration to aid back end automation

The integration of IBM’s Watson AI into SAP’s portfolio will not only help automate back end tasks but also aid in generating business insights, said Bradley Shimmin, chief analyst of AI platforms at Omdia Research.

“I think the integration will help SAP customers in creating a natural language assistant that is capable of taking programmatic action on backend services. This can help SAP customers maximize the value that SAP offers as part of its rich yet diverse product portfolio,” Shimmin said.

The other value proposition of the Watson integration, according to Shimmin, is the ability to surface enterprise knowledge from across large and disparate datasets.

“Experientially, these two capabilities when intertwined will allow SAP users to surface and take action on valuable business insights,” Shimmin said.  

Is SAP’s digital assistant mature enough in NLP?

Although SAP invests in its own research on AI, the reason to use IBM’s Watson to power its services is SAP’s lack of maturity in natural language understanding capabilities, according to Shimmin.

“Like IBM, SAP certainly has invested heavily in its own AI research. However, that research hasn’t focused on NLP and even natural language understanding,” the analyst said. “It is within these areas that IBM has created value, a value which SAP obviously feels will help them reach their goals with SAP Start more rapidly than if they were to develop this self-same technology in-house.”

SAP’s approach was an effective strategy given the demand for AI features in the market and the rapid evolution of the technology, Shimmin said. “Not every big software player needs to build its own ChatGPT or Bard in order to succeed in the technology market. Rather, I think companies that try to chase this emerging market at the expense of their own, established capabilities, will certainly fall behind rivals that have the good sense to work cooperatively where it makes the most sense to do so.”

IBM, SAP collaborating on large language models and generative AI

The Watson partnership with SAP is the result of a longstanding collaboration between the two companies.

Currently, SAP and IBM Consulting support customers with 25 joint intelligent industry solutions that use IBM Watson capabilities underpinned by the SAP Business Technology Platform (SAP BTP), the companies said.

“Over the past 10 or so years, the two companies have grown in such a way that they are much more complementary. But the two have been working together a lot longer than that,” Shimmin said, adding that IBM also delivers SAP BTP on top of its own cloud platform, which ties nicely into Red Hat Enterprise Linux.

In addition to embedding Watson into SAP, the companies said they are working jointly on developing large language models and generative AI capabilities targeted at delivering “consistent continuous learning and automation based on SAP’s mission-critical application suite.”

Artificial Intelligence, IBM, SAP

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , , ,

In April 1972, entrepreneurs Dietmar Hopp, Hasso Plattner, Claus Wellenreuther, Klaus Tschira, and Hans-Werner Hector started an amazing innovation journey, which culminated in SAP’s 50th anniversary celebration in 2022.

Together with our customers and partners, we are happy to celebrate the 10th Anniversary of the SAP Innovation Awards. This award program extends the co-founders’ vision to create positive economic, environmental, and social impact; help the world run better; and improve people’s lives. 

From the very beginning, this program has recognized the achievements of future-minded organizations and individuals with fresh perspectives that have harnessed the power of the latest SAP products and technologies to achieve:

Sustainability and purpose by creating opportunities to accelerate climate action, regenerative economies, and prosperous communities.

Optimization by reinventingthe management of resources, including people, products, raw materials, and capital.

Data-driven decision-making by enabling effective business processes and real-time information flows across business networks, supply chains, and value chains.

The SAP Innovation Awards celebrate customers and partners who are exploring new ideas and business models to deliver real-world innovation:    

Empowering Women-Owned Businesses: WEConnect International helps women-owned organizations gain access to over US$3 billion in global purchasing power.

Digital Transformation Scales Equitable Opportunities: MOD Pizza automates and enables their new-hire processes to efficiently onboard 1000 new hires each month.

Scientific Predictions to Increase Sustainability: Jumbo Supermarkten is committed to forecasting the hourly customer demand of products and rolling it out to hundreds of stores.

This year, we received and published over 220 awards submissions that were filled with inspiring and innovative use cases. Our judges selected 30 outstanding submissions as winners across 10 categories from among the 70 finalists that were announced last month. 

With immense pleasure and pride, I’m excited to announce the 30 winners of our 10th Anniversary SAP Innovation Awards for 2023!

SAP

We thank all the individuals and teams who participated in the SAP Innovation Awards 2023, along with our judges. I personally look forward to the road ahead with our SAP ecosystem of customers and partners to positively impact this ever-changing and often unpredictable market.

Innovation, digital transformation, and agility continue to play a big role in helping manage successful outcomes for our customers.

Visit the SAP Innovation Award website to read more about the winners, honorable mentions, finalists, and participants and to learn more about the SAP Innovation Awards program.

Digital Transformation

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , ,

“Supply chains are under stress,” said Thomas Saueressig, member of the SAP executive board and head of its Product Engineering division, at the recent Hanover Fair. The past few years have shown how prone to failure global logistics chains are, and he added this also has far-reaching consequences for the German manufacturing industry. Digital supply chains, therefore, are needed to be more agile, flexible, resilient, and sustainable. “While companies are aware they need to invest in Industry 4.0 and AI to make their supply chain more resilient, many are still in the pilot phase,” Saueressig said, citing discussions with CEOs and results of a study by Oxford Economics.

Earlier this year, analysts asked nearly 1,000 people around the world in management from 15 industries about the digitization of their supply chains. As a result, managers in manufacturing were more inclined than those in other industries to introduce intelligent technologies on a large scale in order to make better predictions. However, only 36% of the companies surveyed would already use forward-looking analyses in one area of ​​their company.

SAP builds AI into its supply-chain solutions

At the fair, SAP announced it would further expand its logistics chain solutions. SAP Digital Manufacturing, for instance, will be expanded with additional AI tools, which, according to a statement, will allow users to gain AI-supported insights and visual inspections in production to ensure that defective parts are discovered early in the production process and appropriate measures are taken quickly, thus reducing the reject rate and producing higher quality products. The number of complaints would also fall as a result, and the condition and maintenance of systems would be optimized, the provider said.

One of the first adopters of AI-enhanced SAP Digital Manufacturing is Smart Press Shop, a joint venture between Porsche and press manufacturer Schuler. Founded in 2019, the company seized its greenfield opportunity to rethink and redesign the press shop as part of a cloud-first development strategy. Hendrik Rothe, the company’s CEO, spoke of completely paperless production and a fully automated process to configure machines in the production line to cut set-up times nearly in half.

The dark factory dream

According to Rothe, there are many advantages to the digitalization of manufacturing based on the principles of Industry 4.0. In addition to self-optimizing production, continuous traceability, and resource-saving production, smaller batch sizes can also be produced economically. This is an important factor, especially in the automotive industry in the switch to electric vehicles because the quantities are smaller.

Rothe dreams of fully automated dark factories, but there’s still a way to go before those become a reality. According to him, operations are currently at 30 to 40% automation, although the potential varies greatly from area to area. While production itself is fully automated—order-controlled from the SAP system—things are different in the warehouse, as manual processes with forklift drivers continue to work more profitably. “Every automation has to pay off,” says Rothe, and automating transport processes in the warehouse is currently not economical.

Also, while the Smart Press Shop can already carry out its production processes completely paperless, many customers still need paper documents in order to process supplied pressed parts.

Open-data space for manufacturing

Initiatives are currently underway to eliminate fractures in the digital supply chains, and SAP wants to have a say in this. “SAP is in charge of many initiatives in the industry,” says Saueressig, specifically naming two examples. Catena-X, an ecosystem and open-data space, is currently being established in the automotive industry and Saueressig expects the first concrete applications in the current year. And Manufacturing-X is a comparable open-data ecosystem, which will be created in the manufacturing industry.

Around its digital manufacturing, SAP has also expanded other solutions with additional functions. For example, the 3D Product Viewer functions of the SAP Enterprise Product Development solution are now integrated to make all processes, from design and production to service and maintenance, more resilient. So employees in production could display 3D product models in their digital manufacturing dashboard and their work environment, thereby optimizing complex assembly processes. In the SAP Service and Asset mobile application manager, with the help of 3D augmented reality views, field service technicians can carry out maintenance on systems more efficiently to reduce downtimes, SAP says.

Better metrics for sustainable manufacturing

In order to operate their own supply chains more sustainably, users could, in the future, integrate company-specific guidelines for sustainable packaging into the SAP Responsible Design and Production solution. Customers would then have the opportunity to control and monitor the design of packaging more precisely to avoid waste.  

Plus, SAP announced it would expand its integration with EcoVadis, a provider of corporate sustainability ratings. As a result, suppliers could receive more precise sustainability indicators and make their rating status visible in the SAP Business Network. SAP assures its customers this will help buyers see how they can better comply with ​​due diligence and report against the background of new ESG laws. New suppliers can then be selected on the basis of key figures in such a way that sustainability goals in their own business, including the associated value chain, are met.

Digital Transformation, Events, Manufacturing Industry, SAP, Supply Chain Management Software, Vendors and Providers

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , ,

First and foremost, on behalf of SAP, we would like to thank all the SAP Innovation Awards 2023 participants for their hard work showcasing the many ways they are delivering impact within their businesses! We are truly grateful for and inspired by all the incredible submissions received this year. This is the perfect opportunity to share an inside look at the judging process, announce our esteemed finalists, and provide a preview for what is next!

Judging process

This year’s awards represent our greatest yet, as we are celebrating our 10th anniversary with 10 categories:

10th Anniversary SuperstarSustainability HeroIndustry LeaderPartner ParagonTransformation TitanCutting-Edge GeniusBusiness InnovatorExperience WizardAdoption ChampionServices Supernova

Being selected as a finalist in the SAP Innovation Awards is an incredible accomplishment on its own—it takes a wealth of ingenuity and perseverance. Entries are evaluated based on three main criteria:

Use Case Creativity: how compelling or disruptive the use case isTangible Outcomes: the magnitude of the outcome, impact on individuals and society, and significance of the quantified resultsIntelligent Enterprise: how well the entry demonstrates the company’s journey to becoming an intelligent enterprise

What makes being selected as a finalist even more remarkable is how competitive it is. In total, we published 227 submissions, now visible on the Awards website, and of those only 70 were selected as finalists.

Celebrating the Finalists

SAP

On that note, I would like to give a very well-deserved “Congratulations!” to all the finalists celebrated above! I encourage everyone to check out their submissions here. I must say, these are truly among the most impressive entries we have received over the years. As I’ve said before, but it’s worth restating, their stories have inspired us. Once you read their stories, I know you will draw inspiration from them too.

The winners announcement is rapidly approaching!

The winners will be announced on April 12, 2023! Out of the 70 finalists, the winners’ judging panel will narrow it down to 30 entries to be crowned as winners of the 2023 Innovation Awards.

The winners will be globally recognized as innovators, earn bragging rights, and be featured in numerous promotional opportunities such as podcasts, media interviews, CIO.com blogs, speaking opportunities, and a whole lot more! They will also receive a Sapphire Orlando 2023 pass or a $1,000 SAP4Good Voucher for a charitable donation.

You can always check out the SAP Innovation Awards website for more information. Once again, a big thank you to all the Innovation Awards participants, and we wish all our finalists the best of luck. Stay tuned for the big announcement coming in April!

Digital Transformation

Posted on Posted in Digital transformation, General topics Tagged with , , , , , ,

With the threat of a recession looming, cost pressures increasing, and the deadline to move off SAP ECC swiftly approaching, SAP customers have a lot to consider as they plan for the year ahead.

Here are some of the trends we expect to play out as the year goes on, specifically for SAP customers.

1. SAP will hold firm on expiration of ECC support

Though customers may be looking for an extension, we expect SAP will not extend the expiration of mainstream maintenance for SAP Business Suite 7 core applications beyond 2027. SAP has already extended the deadline once — in 2020, it extended support from 2025 to the end of 2027. We also expect SAP to position alternative support options, via its extended maintenance option, for an additional 2% on your maintenance base or customer-specific maintenance through 2030.

Customers will likely continue to believe that SAP has not presented a strong enough business case to upgrade to S/4HANA. However, it will be difficult to argue that SAP hasn’t provided ample opportunity to plan and execute an upgrade or understand the financial implications for delaying the move to S/4HANA. Any extension on SAP’s part would fly in the face of its strategic objectives. Customers need to consider this deadline as final and start preparing now if they haven’t already.

2. SAP will aggressively position RISE

SAP’s agenda goes beyond migrating SAP ECC clients to S/4HANA. Migrating customers to RISE, its cloud offering on a subscription-based model, is of utmost importance. SAP RISE is the cornerstone of SAP’s long-term financial plan to secure increased renewal revenue.

SAP’s motivations and commitment to this offering were made clear back when its predictable revenue, a major factor in overall company valuation, was in the low 70s while other pure-play SaaS providers were in the low to high 90s. In its 2022 year-end earnings call, SAP boasted predictable revenue of 79% with aspirations to reach 85% by 2025. The stakes for SAP are high and customers should anticipate that SAP’s sales and negotiation tactics will reflect that and will include:

A highly coordinated approach/advocacy for RISE adoption throughout the partner network, including systems integrators (SI) and hyperscaler partnersPositioning the long-term vision, product development, and innovation to be focused on RISE vs. S/4HANA On-PremiseLeveraging executive-level client relationships to influence and offset potential deficiencies in RISE identified by client evaluation teamsOffering highly unfavorable pricing and commercial terms related to S/4HANA On-Premise license arrangements vs. historical SAP practices

Customers should anticipate the pressure SAP will apply for RISE adoption and prepare their organization to proactively manage SAP executive-level relationships. It’s also advisable for customers to conduct a thorough review of their SAP agreements and commercial protections before assuming a false sense of security with respect to their purchase or negotiation position for additional on-premises licenses.

3. Customer’s will struggle with RISE evaluations

Many clients have yet to come to the realization that the evaluation of RISE is more akin to evaluating a managed services offering than a pure-play SaaS solution. Companies also are at risk of underestimating the complexities and implications related to their existing operations and adjacent partner relationships. For example:

It’s in SAP’s nature to sell software, not a managed service offering. At worst, they will avoid the conversation completely, and at best, they will try to stay at a high-level on critical topics like environment sizing, roles and responsibilities, and modifications to service-level commitments.Most SAP ECC and S/4HANA customers have third-party support relationships, either in the form of traditional on-premises infrastructure support, cloud managed services, and/or application maintenance and support. An assessment of the current and future state of these relationships should be conducted in parallel with the RISE evaluation.Although SAP provides the flexibility to allow a customer to select its hyperscaler of choice through the RISE model, many customers already have or are contemplating sizable commitments to AWS, GCP, and Microsoft Azure. These companies have enjoyed sizable investments from hyperscalers in exchange for workloads. The question customers must answer is whether it’s in their interest to sever their hyperscaler relationship through an SAP RISE offering.

Customers who anticipate the complexity of their RISE evaluation and proactively develop an integrated sourcing and evaluation strategy will be positioned to make more informed and effective decisions.

4. SAP will target midmarket companies

We expect SAP to put significant energy into capturing more of the midmarket as these companies are more likely to adopt a single, vertically integrated solution like RISE. Unlike most enterprise-level companies, midmarket companies are nimbler and faster in their decision-making process and more likely to seek a single partner versus a multi-partner strategy. These companies are also more likely to implement SAP RISE faster than an SAP enterprise customer. All these factors present a meaningful opportunity to SAP. Because of this, these midmarket companies should be asking:

Is SAP presenting a commercial model that allows our organization to scale in a financially responsible manner?Is SAP presenting prospective implementation partners capable of successfully delivering the project?Is SAP and its implementation partners presenting a realistic view of the program scope, approach, and requirements for success?

5. Consulting firms will invest in ‘Phase 0’ initiatives      

Although it’s too early to give up on growth in 2023, we anticipate that the consulting and system implementation community will emphasize growth for 2024 and beyond via continued positioning of Phase 0 initiatives. We view this as an opportunity for companies that are not currently undertaking an SAP ECC to S/4HANA migration and do not expect the funding to commence their journey to S/4HANA until late 2023 or early 2024.

That said, every opportunity comes with a price and potential downstream risks that companies would be advised to consider as they undertake Phase 0 initiatives. We recommend keeping the following questions in mind:

Is the Phase 0 consulting firm a likely candidate for the implementation phase? If so, is your strategy to sole source? Does your timeline allow for an SI RFP process? Is there a potential for your organization to lose negotiation leverage by walking into an unplanned sole-source situation?What is the scope of the Phase 0? Is the scope aligned solely to the consulting partners methodology, or does it consider the requirements your company has to actually approve to proceed to the next phase of the project?Does your plan, board of directors, or regulatory commission call for an independent review and validation of the business case and strategy? If so, what is your plan to obtain such an independent perspective?Does the scope of your Phase 0 include the development of an integrated sourcing strategy designed to enable the evaluation, selection, and negotiation of multiple workstreams (including SAP software, implementation services, hyperscaler services, cloud managed services, and application maintenance and support)?

Before customers take advantage of the “time” to plan in 2023 and the investments that both SAP and consulting firms are willing to make in Phase 0 initiatives, they should think through the end-to-end decision process and their requirements rather than default to the approach and strategies proposed by any partner.

6. SAP customers will continue to migrate to the cloud

We anticipate that customers committed to staying on SAP ECC or planning to migrate to SAP S/4HANA while maintaining their perpetual licenses will continue to aggressively move to the cloud. Some companies will do so proactively, while others may be compelled to do so as a result of changes in the strategy of their existing managed services providers (e.g., Kyndryl and Dell Virtustream).

In addition, many companies will be making this migration in a context that goes beyond their SAP environment, including other application workloads and non-SAP transformational initiatives with AWS, Google, and Microsoft. As companies consider their overall cloud strategy, they should consider the following:

Evaluate SAP RISE in conjunction with their hyperscaler relationship and cloud managed services relationships to allow for effective decision-making and manufacturing of leverage.Take inventory of existing application and cloud migration roadmaps and future growth projections, as our experience shows that many organizations are blowing through their spend commitments very early in their agreement term.Assess their existing hyperscaler agreements, including spend commitments and incentives to determine whether they are market competitive and will scale commercially to account for future growth.

7. Customers will reimagine managed services relationships

In conjunction with the cloud migration, we believe companies will continue to reimagine their operating models and existing managed services relationships. The introduction of SAP RISE, the market disruption caused by the hyperscalers, and the continued pressure to reduce operating cost and improve operating scale will serve as the primary drivers in this area. As organizations reimagine their future state, they will be compelled to ask and answer the following:

Would it be more efficient to build a cloud center of excellence (COE) internally or proceed with a managed services model?Should I proceed with my incumbent on-premises managed service provider or select a new cloud managed service provider?Can I leverage my system integrator and SAP to provide a comprehensive managed services solution, such as Accenture’s SOAR offering, or proceed with a multi-vendor approach?Can I leverage the selected S/4HANA systems integrator or my existing SAP ECC application management services (AMS) provider to provide application maintenance and support?

Although SAP may serve as a major consideration with respect to the overall strategy, many organizations have managed services relationships that expand well beyond the boundaries of SAP, including security services, non-SAP AMS, help desk services, field services, etc. Renegotiating these relationships and assuming a partial termination of existing services will also need to be considered as part of an overall strategic sourcing plan.

Many companies are well on their way to tackling these decisions. But the vast majority of SAP’s install base is just starting this journey and are likely to be leveraging the majority of 2023 to develop and execute a strategy to answer these questions.

ERP Systems, SAP

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , ,

SAP’s acquisition of a majority stake at customer experience (CX) software firm Qualtrics back in 2018 for $8 billion was never a match made in heaven. Both companies remained incongruous to each other’s progress before Qualtrics was sold to Silver Lake and CPP Investments earlier this week, according to experts and analysts.

“Even though Qualtrics is still a market leader and a strong product, it just didn’t fit very well with SAP’s strategy,” said Hyoun Park, principal analyst at research firm Amalgam Insights. “SAP was struggling to integrate Qualtrics sales into its existing environment. It turns out that Qualtrics is not an easy solution to integrate into the standard SAP platform sale as the core Qualtrics audience is removed from the typical enterprise application platform buyers.”

Qualtrics’ integration into SAP became even more difficult post the pandemic, according to Omdia principal analyst Mila D’Antonio.

“Qualtrics is oriented from the contact center and is in a crowded market. I suspect many Qualtrics customers had non-SAP vendors already in place and weren’t interested in displacing them,” D’Antonio said.

Qualtrics and SAP were never a culture fit

SAP could have avoided acquiring Qualtrics back in 2018  for an $8 billion price tag despite the CX market showing signs of growth and opportunity since the two firms were never a natural fit, according to analysts.

“While there was no doubt that CX mattered tremendously, there were a lot of questions about why SAP needed to buy Qualtrics versus retain them as an ecosystem partner along with numerous other popular CX products customers might use,” said Liz Herbert, principal analyst at market research firm Forrester. “Likewise, Qualtrics’ ability to partner with SAP’s competitors became in jeopardy once they were part of SAP.”

The other issue, according to Constellation Research’s Principal Analyst Liz Miller, was that these firms were also not a “culture fit”.

“I think everyone could see that this was not a terrific cultural fit for either organization. This is especially true now that the senior leadership at Qualtrics has blended that ‘mountain cool’ vibe of their founding culture with a new business focus enabled by leaders who spend decades at Microsoft,” Miller said.  

SAP to focus on its core products

SAP’s decision to sell the entirety of its stake in Qualtrics is a result of the company’s strategy pivot to focus on its core offerings, mainly S/4HANA.

“The new criticality for SAP is more focused on harnessing the data that the organization is already capable of aggregating and better connecting that ‘back office’ data from systems like ERP to those ‘front line’ technology tools across sales, service, marketing and commerce,” said Miller.

Qualtrics, according to Herbert, “presented a distraction” for SAP. “The acquisition of Qualtrics presented a distraction from SAP’s multi-billion-euro ERP business which was in the early days of a major shift from the old ECC product to the new S/4HANA product at that time,” Herbert said.

For SAP, Qualtrics was not the only acquisition in the CX space. It has also acquired other CX firms over the past few years, including Emarsys, Gigya, and Callidus. The company is now expected to focus more on these businesses as part of its CX products strategy, according to analysts.

“The sell-off of Qualtrics will allow SAP to focus on innovating Emarsys and its broader CX portfolio and integrating those systems with SAP’s enterprise resource planning,” D’Antonio said. “Such focus would indicate a go-to-market strategy aimed at sales, marketing, and ecommerce, rather than the contact center.”

What does the stake sale mean for CIOs and enterprises?

SAP’s stake sale in Qualtrics is more likely to usher in more innovative CX products in the company’s portfolio and have less to no impact on CIOs or enterprises, analysts said.

“The Qualtrics operation was largely separate from SAP, anyways. If anything, this acquisition should help accelerate Qualtrics product innovation again as now there is no parent company with a conflicting vision against Qualtrics’ role as a surveying, interaction, and experience data collection solution,” said Park.

CIOs are unlikely to feel much effect, according to Bob Parker, senior vice president at market research firm IDC. 

“Post the ownership change, it should be easier for CIOs to integrate the survey tools across the experience related applications (customer, employee, and product) they have in their portfolio along with analytic capabilities that are specific to experience management such as complex conjoint analysis,” Parker said.

However, heavy Qualtrics users are likely to see an increase in connections, APIs and ecosystem partner integrations as the company actively builds out its marketplace and ecosystem beyond SAP, Constellation Research’s Miller said.

What does the new deal mean for Qualtrics?

SAP’s stake sale in Qualtrics comes at the right time for both organizations as they can double down on their core products while leveraging the connections they forged during their time together, analysts said.

“The leadership doesn’t see any change for Qualtrics’ strategy as a result of the acquisition. In fact, they are more focused on their core growth with the XM (experience management) platform by offering a unified strategy across customer support, customer success, and scaling go-to-market through a partner-first strategy,” said Sudhir Rajagopal, research director at IDC.

In addition, CX remains a critical investment area for companies across industries and this should be a growth opportunity for Qualtrics post SAP’s divestiture, according to analysts.  

“Based on the customers I spoke with, there are still a lot of them who still only use their survey functionality, there is a great amount of growth still to unlock in their current customer base,” said Lou Reinemann, research director at IDC. 

Qualtrics has room to expand its data usage to support machine learning and contextual analytics use cases, Park said. The company is already working towards adding machine learning and AI-powered tools to its product portfolio.

Last week, Qualtrics unveiled Frontline Care — an omnichannel analytics and AI-powered tool, designed to aid customer-facing employees understand customers’ needs and actions along their journeys and respond proactively.

“This is notable, as enabling deep, real-time customer insights is the key to solving the omnichannel dilemma and improving CX,” Omdia’s D’Antonio said.

Mergers and Acquisitions, Oracle

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , ,

Moving SAP workloads to the cloud promises to be transformational, but it’s not for the faint of heart. Goals for an ERP modernization initiative often range from lowering costs through infrastructure savings to adding cloud-based capabilities to ERP tasks with minimal disruption to day-to-day business. Achieving these objectives takes perceptive analysis, meticulous planning, and skillful execution.  

“There are many factors to consider, including application complexity, legacy application requirements, data location, and compliance,” says Dilip Mishra, SAP delivery leader for the Cloud Migration and Modernization practice at Kyndryl. Teams must determine which workloads move to the cloud and which will remain on-premises. What’s more, adds Mishra, many organizations are likely to encounter a “long-tail” of interdependencies between applications and infrastructure that requires special expertise to unravel.  

Perhaps most important, the undertaking will not succeed without cooperation between IT and business leaders. “To overcome the perception that from a business perspective, the migration might look like a lot of effort for a little return, IT leaders must communicate the business case for moving each workload,” Mishra says. CIOs and their teams should also consider providing a systematic framework for delivering and measuring the value to the business now and in the future, covering technology, operations, and financials.  

In short, IT leaders can expect curves in the road that only seasoned experts can navigate without mishap. To that end, Kyndryl and AWS have established a partnership with an extensive track record in rehosting and re-platforming SAP workloads on AWS cloud services.  

Schneider Electric’s story  

Schneider Electric’s journey to the cloud began by moving its SAP applications from an outsourcer to a Kyndryl data center. After stabilizing the environment and integrating the operations of numerous acquired companies, Kyndryl optimized the applications and infrastructure while planning the transition to AWS. With the goal of maintaining continuous business operations, Kyndryl mapped out a migration to AWS that accorded the Kyndryl data center an important role in a hybrid cloud architecture.    

“A hybrid environment provides the flexibility of workload placement based on business requirements and provides a smoother transition to cloud because the customer has time to plan and re-engineer without going through a big-bang cutover,” says Naresh Nayar, Kyndryl distinguished engineer.   

Schneider’s internal team designed and built the AWS “landing zone,” a secure environment with strict rules about firewalls, connectivity, and security groups. Kyndryl architected the new operating environment using its framework for cloud operations and provided specifications that AWS and Schneider technical teams used to provision the new infrastructure in the landing zone.  

Schneider Electric’s move shows that a non-disruptive cloud transition is possible with careful planning and a deep portfolio of skills. For such enterprise migrations, experience matters: Currently, more than 5,000 SAP customers run on AWS. The AWS portfolio includes AWS migration Hub, AWS Application Discovery Service, AWS Application Migration Service, AWS Service Catalogue, and AWS Database Migration Service. For its part, Kyndryl brings to bear more than three decades and 90,000 skilled practitioners providing IT services at the highest level.  

Learn more about how Kyndryl and AWS are innovating to achieve transformational business outcomes for customers.  

ERP Systems

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , , ,

SAP’s Data Warehouse Cloud is evolving, gaining new features and a new name, Datasphere, as the company addresses continued diversification of the enterprise data.

It’s part of SAP’s move to become a more significant player in the business data fabric space, said Irfan Khan, SAP’s chief product officer for its HANA database and analytics.

Khan said SAP is going beyond the usual capabilities of a data fabric by preserving the business context of the data it carries. “We want to preserve the business semantics and the business context of that data,” he said. “We’re not going to have customers make a compromise between accessing the data virtually or federating the data.”

Threat recognition

The competitive threat SAP faces in this space, said IDC analyst Dan Vesset, is that the data landscape is becoming more diverse.

“You have SAP applications and you have more and more of somebody else’s applications in the same environment, and the question then is, where’s the center of gravity? Who has the most pull?” he said.

Khan acknowledged the threat is influencing SAP’s product development.

“A significant part of SAP’s evolution towards this new strategy is recognizing that no single vendor will own the entire customer stack,” he said. “That customer stack is in fact very heterogeneous.”

In the past, SAP and other vendors have assumed that if they create a new product, customers will move their data to it — but that has not always worked out well for either vendors or customers.

SAP is no longer taking a hard line on moving data to its applications, Khan said.

“If you’re running a marketing campaign, more likely you’ll need to have access to SAP data,” he said. “But it just makes it a lot easier to have access to the SAP context through the business data fabric, through Datasphere, without having to redundantly move the data, lose the context, lose semantics, and then have to go to the painful exercise of having to reconstitute all that again.”

The new functions Datasphere offers over Data Warehouse Cloud include automated data cataloging, simplified data replication, and improved data modeling.

The move from Data Warehouse Cloud to Datasphere will be easy, according to Khan: Existing customers will automatically have access to the new functionality and will be charged for usage under their regular SAP consumption agreement. “There’s nothing more to pay if you don’t use it,” he said.

SAP is also opening it up to partners to add new functionality and make it easier to access data from other platforms through Datasphere.

“We want to make it very easy for SAP’s data to be accessed and to be extended with business context through Datasphere,” he said. “But we’ll also use our new data ecosystem participants.”

Partner agreements

Four partners are signed up to offer Datasphere integrations at launch. Collibra plans to offer enterprises a way to build a complete catalog, with lineage, of all their SAP and non-SAP data. Confluent will connect its cloud-native data streaming platform to Datasphere, making it possible to connect SAP and external applications in real time. Plus, Databricks is making it possible for users of its data lakehouse to integrate it with SAP applications, preserving semantics when data are shared. And DataRobot is helping customers to build automated machine learning capabilities on Datasphere.

SAP has chosen its initial partners to cover a broad range of functions with little overlap between them, noted Vesset. But that doesn’t mean there’s no overlap with Datasphere itself.

Take Datasphere’s new data cataloging and governance functions, for instance. “Theoretically, one could just use Collibra,” Vesset said.

However, he said, SAP will have greater knowledge of the metadata associated with the data held in its applications that the catalog is supposed to capture, and it can invest more in integration with its partners. “If you’re an SAP ERP customer, or if you have multiple SAP enterprise applications, probably the easier path would be to use SAP’s product first, and then use something like Collibra for other data that’s not SAP,” he said.

Four partners are a start, but to make a success of this new strategy to help customers integrate SAP and non-SAP applications into their data fabric, “They absolutely need more, because they need to get to where their clients are, and their clients will have many different tools,” he said. SAP is offering nothing enterprises can’t find elsewhere — at a price. “You can build any of these tools yourself from open-source technologies, but there’s a cost associated with that. That’s the build, buy, or partner decision that every large organization needs to make,” Vesset said. “SAP is hoping that their solution will provide enough efficiency and cost savings for clients to come to them.”

Cloud Architecture, Cloud Management, Cloud Storage, SAP